Google Hit with £1.04 Billion Lawsuit Over Play Store Monopoly

In a fresh legal battle for Google, a British academic is spearheading a class-action lawsuit against the tech giant, alleging misuse of its dominant market position with regard to its Play Store policies. The lawsuit, led by Professor Barry Rodger from the University of Strathclyde, is directed at Google for purportedly stifling competition and imposing exorbitant commissions on Android app developers. The claimants are seeking up to £1.04 billion ($1.37 billion) in damages, intended to compensate thousands of app developers across the U.K. who have reportedly suffered revenue losses since August 2018.

Professor Rodger, an expert in competition law, asserts that Google’s practices effectively exclude competitors from the app distribution market. He argues that the company’s imposition of technical and contractual restrictions ensures that the Play Store remains the exclusive venue for U.K. app developers to market or sell their Android apps. This monopolistic stance, according to Rodger, has allowed Google to enforce excessive and unfair commission rates—sometimes up to 30%—on all digital content sales conducted through the Play Store.

Rodger emphasizes the need for fairness and equal opportunity within the rapidly growing digital economy. “It is extremely important that the principles of fairness and equality of opportunity underlie our rapidly expanding digital economy by ensuring effective redress for those harmed by any abusive anti-competitive behavior in the marketplace. I am bringing this claim because I believe that big tech businesses like Google should not be allowed to run roughshod over small businesses,” he stated. Rodger, who imparts lessons on the enforcement of competition law to his students, sees this lawsuit as a practical application of his teachings, aiming to secure compensation for the significant financial damage experienced by U.K. Android app developers.

The case before the U.K. Competition Appeal Tribunal adds to the ongoing global scrutiny of Google’s Play Store practices. The European Commission, the U.K.’s Competition and Markets Authority (CMA), and the U.S. Congress have all previously examined Google’s conduct, contributing to a broader regulatory focus on the company. Although the CMA recently concluded its three-year investigation into Google’s App Store, it cautioned that the matter might not be fully resolved. With the introduction of the Digital Markets, Competition and Consumers Act in May, the CMA decided to pause its proceedings, citing that the new legislation could address some of the concerns. However, the CMA rejected Google’s proposed changes to allow alternative payment options, deeming them insufficient.

In addition to this lawsuit, Google is entangled in eight other competition cases in the U.K., including one from Connexity U.K., a shopping ad management platform, which also accuses Google of abusing its dominant position.

Damien Geradin, founding partner of Geradin Partners, which is representing the claimants, underscores the global nature of the scrutiny against Google. “Google is one of the most powerful companies in the world. Regulators around the globe have scrutinized its Play Store conduct and consider it harmful,” said Geradin. He argues that despite this scrutiny, Google continues to leverage its monopoly to undermine competition and exploit app developers. Therefore, he insists that it is crucial for U.K. developers to have the opportunity to seek redress for what he describes as Google’s wrongful practices.

In response, a Google spokesperson defended the company’s practices, highlighting the flexibility Android offers compared to other platforms. “This lawsuit ignores the benefits and choice Android and Google Play provide as well as the competitive market in which we operate and we will defend it vigorously,” the spokesperson stated. They noted that Android supports multiple app stores and sideloading, allowing developers to build successful businesses. Google also claims that it competes fairly and vigorously for developers and consumers, with its service fees being the lowest among major mobile platforms. According to Google, 99% of developers benefit from a service fee of 15% or less.

As this latest legal challenge unfolds, it remains to be seen how it will impact Google’s Play Store policies and whether it will prompt broader regulatory changes in the digital marketplace. The outcome of the lawsuit could potentially reshape the landscape for app developers and further define the limits of market dominance in the tech industry.